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1. 2. Computer Corp. reinvests 60% of its earnings in the firm. The stock sells for $50, and the next dividend will be $2.50 per
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Computer Corp. reinvests 60% of its earnings in the firm. The stock sells for $50, and the next dividend will be $2.50 per share. The discount rate is 15%. What is the rate of return on the company's reinvested funds? (Round your answer to 2 decimal places.) % Rate of return on reinvested funds One year ago you purchased 100 shares of Dog Bites common stock for $25. You received dividends of $.70 per share and just sold the shares for $26.25 each. Your marginal personal tax rate is 40%, your dividend tax rate is 30%, and capital gains are taxed at 50% of your personal rate. a-1. What is your before-tax rate of return? (Round your answer to 2 decimal places.) Before-tax rate of return a-2. What is your after-tax rate of return? (Round your answer to 2 decimal places.) After-tax rate of returnStep by Step Solution
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